Divorce is always a tricky process to navigate. But add an imminent retirement and a host of pension funds to the mix, and you will find yourself facing an entirely new animal. For those who are entitled to a share of their soon-to-be ex’s pension plan and benefits, preparing a Qualified Domestic Relations Order (QDRO) is absolutely necessary.

When you file a QDRO, you are establishing your legal right to receive a percentage of payments (i.e., the account balances). Essentially, this document will make you the co-beneficiary of existing accounts.

When filed properly, a QDRO is an asset for any couple having to divide their retirement accounts. However, oblivious spouses make several mistakes that lead to unfair divisions and poor payouts. To protect your future and ensure you are receiving what you are entitled to, avoid the following costly QDRO mistakes, which have the potential to derail your retirement.

Non-ERISA plan (e.g., supplemental and excess benefit plans) are not subject to division by a QDRO. Additionally, a majority of these “golden handcuff” plans do not include survivor benefits, and they terminate the moment the employee passes. To avoid future litigation, it is critical that you and your attorneys know the type of plan before settlement agreements take place.

The gross dollar value of the plan is almost guaranteed to change. How much it changes depends on the amount invested. In the agreement, make sure to indicate whether the amount dispersed will reflect those gains and losses, or will remain stagnant after the date of signing.

Not considering tax implications during division

All plan types are not equal. When dividing assets and retirement accounts, understand the tax implications that come along with each of them. In the case of a pre-tax account (e.g., a 401K) the government will be entitled to its share when it is taken out during retirement. In contrast, an after-tax account (e.g., a Roth IRA) is not deducted upon withdrawal.

In other words, if a divorcing couple is agreeing to split a 401k and a Roth IRA that are equal amounts, then the spouse receiving the Roth IRA will gain more—since that money will not be taxed. To avoid being short-changed, make sure you understand the tax implications during the settlement.

Perhaps a loan balance has been worked into the QDRO, but there are recurring repayments on it. If so, the document needs to define whether the payment sum will reflect the loan balance on the date of signing (or the date of division).

As is the case with all aspects of divorce, maintain a clear head. Then you will be able to focus on the details and seek assistance from qualified professionals in the legal and financial fields. A small oversight on one document can derail a long, happy retirement, so take the necessary steps to protect yourself and your financial future.

He earned his Bachelor of Arts from Dartmouth College, double majoring in Economics and Philosophy, and his Masters in Business Administration at Spain’s IE Business School.

Before founding LaGrande Global, Shawn helped manage $1.1 billion in client assets at Bernstein Global Wealth Management. He also worked as a credit research analyst at J.P. Morgan. He is a Certified Divorce Financial Analyst, and he has been an advisor to numerous high-stakes divorce cases.